Deschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org
AGENDA REQUEST & STAFF REPORT For Board Business Meeting of August 10, 2016 DATE:
August 4,2016
FROM:
Torn Anderson
Administrative Services
x6565
TITLE OF AGENDA ITEM:
Consideration of Board signature of a Payment In Lieu of Taxes (PILOT) agreement with NorWest
Energy 2, LLC
PUBLIC HEARING ON THIS DATE? No
BACKGROUND AND POLICY IMPLICATIONS:
House Bill 3492 from the 2015 State legislative session established the ability of solar energy
developers to apply to the local taxing entity for an agreement that would exempt a property/project
owner from property taxes, and in its place pay a set amount based on the capacity for solar energy
(megawatt) generation. The County has already established a Rural Renewable Energy Development
(RRED) zone locally, although the PILOT framework is a separate program and is not able to be
combined with a RRED project. NorWest Energy 2, LLC has requested that the County to approve a
PILOT agreement for a new solar energy project at 62435 Erickson Rd, Bend, OR 97701. The
proposal has been reviewed by County Legal, Finance, and the Assessor's Office, and found to be in
compliance with the HB 3492, as implemented through ORS 307.175.1t is expected that the 20 year
FISCAL IMPLICATIONS:
It is estimated that the PILOT agreement will result in $70,000 in additional revenue collection that
would otherwise be paid through a RRED designation.
RECOMMENDATION & ACTION REQUESTED:
Move approval of Document No. 2016-551, a PILOT agreement with NorWest Energy 2, LLC, for a
new solar energy project at 62435 Erickson Rd, Bend, OR 97701.
ATTENDANCE:
Dave Doyle, Legal Counsel
DISTRIBUTION OF DOCUMENTS:
Administration, Assessor and Legal
1112/16 PAYMENT IN LIEU OF TAXES AGREEMENT
This PAYMENT IN LIEU OF TAXES AGREEMENT ("Agreement") is effective as of
_ _ _ _ _ _ _---', 2016, by and between NorWest Energy 2, LLC, an Oregon Limited
Liability Company authorized to do business in Oregon ("Company") and DESCHUTES
COUNTY, OREGON, a political subdivision of the State of Oregon ("County")(each a "Party"
and collectively, the "Parties"), with respect to the following facts:
A.
Company is in the process of developing, and will be constructing, a solar energy
generation facility that will be commonly known as Neff Solar, with a rated nameplate capacity
of9.9 megawatts alternating current (MWac) ("Solar Facilities").
B.
The Solar Facilities will be located entirely within unincorporated Deschutes
County, at site address 21836 Neff Rd, Bend, OR 97701 (western site access); 21906 Neff Rd, Bend, OR
97701 (eastern site access), and Assessor tax identification number 1712250000501 ("Solar
Site"). A diagram of the Solar Site and Solar Facilities (collectively, the "Solar Project") is
attached as Exhibit A. A legal description of the Solar Site is attached as Exhibit B.
C.
Company is in possession and control of the Solar Site, and will be in possession
and control of the Solar Project upon construction of the Solar Facilities. It is estimated that the
Solar Project will be operational in the Fourth Quarter of 20 16.
D.
Company and County mutually desire to enter into this Agreement for payment of
a fee in lieu of property taxes for the Solar Project, pursuant to Oregon House Bill 3492 (2015),
codified at 2015 Oregon Laws, Chapter 571.
NOW THEREFORE, for good and valuable consideration including the terms, conditions
and covenants of this Agreement, the Parties agree as follows:
1.
Exemption. This Agreement shall apply to the tax year from July 1, 2017 to June
30, 2018, and each of the next tax years thereafter, through and including the tax year July 1,
2037 to June 30,2038 ("Term"). Except as otherwise provided in this Agreement, the Solar
Project shall be exempt from property tax for the Term of this Agreement. The Term of this
Agreement (as measured from the first day of the first tax year to which it applies) shall be equal
to 20 years unless terminated earlier in accordance with paragraph 8.
2.
Payment in Lieu of Taxes. The fee in lieu of taxes ("Fee") shall be $7,000
multiplied by the rated nameplate capacity of the Solar Project measured in MWac.
PILOT AGREEMENT
#2016-551 DC 201 6 -5 51 3.
Initial Request for Computation. No later than December 31, of the year
preceding the first property tax year of the Term ofthis Agreement, as set out in Section 1,
Company shall file with the County Assessor a copy of this Agreement and a request for
computation of the fee for the first tax year. The request shall include any information required
by the Assessor to compute the fee.
4.
Subsequent Requests for Computation. On or before December 31, preceding
each tax year during the Term of this Agreement, Company shall file with the County Assessor a
request for computation of the Fee for the upcoming tax year. If the owner of the Solar Project,
the person or entity in possession or control of the Solar Project, and/or the nameplate capacity
of the Solar Project measured in MWac has changed since the filing of the last request for
computation, the request shall include the new information.
5.
Late Fee. Any request for computation filed after December 31 for the upcoming
tax year shall include payment of a late fee of $200.
6.
Computation and Payment of Fee. No later than the February 1 next following
the filing of each request for computation of the fee, the County Assessor shall notify Company
in writing of the amount of the Fee for the upcoming tax year. Company shall pay the Fee on the
next following March 1 or thirty days after the County Assessor's notice was sent, whichever is
later.
7.
Failure to Pay Fee. If Company does not timely pay the Fee as required by
Section 6, then the Solar Project shall not be exempt from property taxes for the upcoming tax
year and shall be assessed and taxed as other similar property in the County is assessed and
taxed; provided, however, that if Company subsequently pays the Fee within one year after the
date payment became delinquent, plus interest at the rate prescribed in ORS 311.505(2), then the
Solar Project's property tax exemption for the upcoming tax year shall be restored.
I
I
Ii 8.
Termination. If Company fails to pay any Fee within one year after payment of
such Fee became delinquent, then: (a) the Solar Project shall be disqualified from the exemption
provided for herein and this Agreement shall terminate; (b) the Solar Project shall be assessed
and taxed as other similar property is assessed and taxed for the tax year to which the unpaid Fee
applied, and thereafter; and (c) Company shall pay County, as an additional assessment against
the Solar Project, an amount equal to the unpaid Fee for the year prior to such termination .. The
notice shall apply to the tax year following the year in which the notice has been given and shall
have no impact on any tax year prior to the notice. The Parties may terminate this Agreement at
any time by mutual written agreement.
9.
Eligibility. Property constituting a solar project that has received an exemption
under ORS 285C.350 to 285C.370 or 307.123 for any tax year is not eligible for participation in
this Agreement.
PILOT AGREEMENT
I
!
#2016-551 10.
Notices. All notices required or pennitted hereunder shall be in writing and shall
be given by overnight delivery certified mail, postage prepaid, addressed to each Party as
follows, or at such other addresses as either Party may hereafter designate in writing:
To Company: NorWest Energy 2, LLC 3250 Ocean Park Blvd, Ste 355 Santa Monica, CA 90404 To County: County Administrator 1300 NW Wall Street Bend, OR 97703 To County Assessor: Assessor 1300 NW Wall Street Bend, OR 97703 11.
Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of each of the Parties, their respective heirs, executors, administrators, legal
representatives, successors and assigns.
12.
Assignment. The Company may assign, transfer or pledge its rights under this
Agreement only upon prior written consent by County; provided, however, such consent shall
not be required for the granting of a security interest in, collateral assignment of, or other
encumbrance of any or all of the Company's interest in this Agreement in connection with the
financing of this Solar Facilities..
13.
Integration. This Agreement contains the entire agreement of the Parties and
supersedes all prior and contemporaneous agreements, oral or written.
14.
Governing Law. This Agreement shall be subject to, and governed by, the laws
ofthe State of Oregon, and venue for any dispute hereunder shall lie in the Circuit Court for
Deschutes County, Oregon.
15.
Interpretation. This Agreement implements Oregon House Bi113492 (2015) and
shall whenever possible be interpreted in a manner consistent with such law.
16.
Counterparts. This Agreement may be executed in counterparts, and an electronic
or facsimile copy of a signature shall be deemed an original for all purposes.
[SEPARATE SIGNATURE PAGE ATTACHED]
PILOT AGREEMENT
#2016-551 WHEREFORE, Company and County have executed this Agreement as ofthe date first
set forth above.
COMPANY:
COUNTY:
Deschutes County, Oregon
By: ________________________
By: _________________________
Title:
Commissioner Chair
----------------------­
By: _______________________
Commissioner Vice Chair
By: _________________________
Commissioner
1
PILOT AGREEMENT
#2016-551
EXHIBIT A PILOT AGREEMENT
#2016-551 EXHIBITB RECORO LEGAL OESCRIPDON
THE SOUTHEAST QUARTER Of THE SOUTHEAST QUARTER (SE1/4 SE1/4) OF
SECTION 25. TO~SHIP 17 SOUTH. RANGE 12 EAST Of THE wtLLAMETTE
MERIDIAN. DESCHUTES COUNTY. OREGON. AND THE WEST HALF OF THE
SOUTHEAST QUARTER (W1/2 SEl/4) OF SECTION 25, TO~SHIP 17 SOUTH.
RANGE 12 EAST Of THE wtLLAMETTE MERIDIAN. DESCHUTES COUNTY. OREGON.
EXCEPT THAT PORTION LYING WITHIN PUBUC RIGHT-Of-WAY.
PILOT AGREEMENT
#2016-551